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San Angelo mayor demands housing be a priority after hearing results of study

A San Angelo housing study revealed a limited vacancy and a high demand for middle-income housing.(Photo: fstop123, Getty Images)

SAN ANGELO – A study found San Angelo has a tight housing market that doesn't meet the majority needs of residents.

"We have a pretty major housing costs issue for anyone here that's lower moderate wage income and is renting," said Steve Spillette, president of CDS Community Development Strategies. "We can't necessarily call it a crisis, but you're on that path."

The housing demand study came from CDS, a market analysis consulting firm from Houston. It surveyed 1,311 San Angelo employees to get their opinions on the housing situation in San Angelo.

"Bottom line is that for your middle class buyers, and especially folks that are trying to (purchase) their first house coming out of rental, the market is very tight and getting tighter," Spillette said. "The supply of homes in the range that those buyers need has been shrinking a lot."

Over half of San Angelo households have an income of less than $50,000 a year, meaning the average house price for most residents should be $180,000 or a max rental price of $1,200. This equals 30% of gross income going to housing expenses.

For the single family housing market, Spillette said it is mostly a seller's market with a three month supply.

"That's a tight supply," Spillette said. "The main thing that you need to take away on the for-sale side is that your dominant market is under $250,000. Above that level ... demand really drops off."

Rental housing was also addressed in the report. Though the 1,100 units built in the past 10 years may seem like a lot, the report found apartments were 96% full and those newer properties were not in line with the average resident.

"Demand is very strong, but there's almost no vacancy. Your average rents have gone up 5% in just 12 months and 25% just since 2017," Spillette said. "Those (newer units) are weighted towards the high end of the rental market. Over half of those units have an average rent of $1,000, including one bedroom units."

One thing driving up prices is the return of the Permian oil boom. Renters from the oil business are coming in with higher income in a tight market.

Over half of the renters are also considered "cost burdened," according to the report. The standard rent should be 30% of income, which allows people to have enough leftover to take care of their families. Yet, most San Angelo residents are sacrificing this quality of life to afford a roof.

Part of the problem with building housing in the majority range is the cost to build, which CDS said is a national problem.

"We know that on the for-sale side, there are local builders that are trying to produce for sale homes for that entry level," Spillette said. "It's not easy."

He suggested some ideas to help make it easier to build multi-family residences. His suggestions were:

Redevelop vacant or older homes in existing neighborhoods

City partners with builders to help with costs

Have the city look at its regulatory and permitting processes

Build multi-family homes, such as duplexes

A housing navigation center, which could help first-time home-buyers

The data seemed to light a fire for Mayor Brenda Gunter, who announced her overwhelming support to address these issues.

"We do need to make sure that there's a quality of life available to the citizens who have selected San Angelo to be their home," Gunter said. "We cannot continue to consider ourselves a quality of life city if we don't have affordable housing."

She called for updates on several projects and confirmed on multiple occasions that the public's concerns were heard.

"This report is very alarming," Gunter said. "I strongly believe in this conversation. This is a huge priority for me ... Housing is key right now."

Gunter also said the findings were "eye-opening."

The housing issues will see a return to the city council agendas at a later date.